The Biden administration provided the most detail yet about who could be eligible for relief under its latest plan for student-loan forgiveness. The categories of borrowers who may qualify for debt cancellation are far from certain. The Department of Education is in the midst of a rulemaking process that will ultimately determine the scope of any debt-relief plan. The details released Monday are part of an agency proposal that will be finalized over the next several months.
But if the eligibility criteria for relief the Department is proposing remain intact, the debt forgiveness will likely be more targeted than the administration’s initial plan, which the Supreme Court struck down in June. Under that plan, borrowers earning less than $125,000 would have had up to $20,000 in debt forgiven. Still, in some ways, the proposal appears to incorporate elements of the initial plan of mass-debt forgiveness. It also gets at some of the systemic issues with the student-loan program that borrower advocates have complained about for years. Here’s who could be eligible: Certain borrowers on income-driven repayment plans who owe more than when they entered repayment: Under income-driven repayment, the government provides borrowers with the ability to repay their debt as a percentage of their income and have the remainder forgiven after at least 20 years of payments. Historically, because monthly payments on these plans are tied to income, some borrowers’ payments were so low that they didn’t touch the loan principal and borrowers watched their balances grow. Under the Department of Education’s proposal released Monday, borrowe …
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But if the eligibility criteria for relief the Department is proposing remain intact, the debt forgiveness will likely be more targeted than the administration’s initial plan, which the Supreme Court struck down in June. Under that plan, borrowers earning less than $125,000 would have had up to $20,000 in debt forgiven. Still, in some ways, the proposal appears to incorporate elements of the initial plan of mass-debt forgiveness. It also gets at some of the systemic issues with the student-loan program that borrower advocates have complained about for years. Here’s who could be eligible: Certain borrowers on income-driven repayment plans who owe more than when they entered repayment: Under income-driven repayment, the government provides borrowers with the ability to repay their debt as a percentage of their income and have the remainder forgiven after at least 20 years of payments. Historically, because monthly payments on these plans are tied to income, some borrowers’ payments were so low that they didn’t touch the loan principal and borrowers watched their balances grow. Under the Department of Education’s proposal released Monday, borrowe …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]